Behind the Vail
When choosing where to go skiing, the après-ski and chocolat-chaud-on-the-slopes culture of resorts in Europe is a popular pull for visitors from all over the world, with the continent attracting nearly 200 million visitors every year. But, for those opting to ski stateside, chances are that you might consider one of North America’s larger destinations such as Park City resort in Utah, Whistler Blackcomb, or Breckenridge in Colorado — all of which are owned by one company: Vail Resorts.
Vail is America’s largest ski resort owner and operator. Now a nearly $9 billion company, Vail can trace its roots back to 1962, when Earl Eaton and WW2 veteran Pete Seibert opened the company’s eponymous resort in Colorado. Operating for more than two decades as an independent business, Vail — which had expanded by building the neighboring resort Beaver Creek — was eventually acquired by George Gillett, a local businessman who oversaw a massive renovation of the Vail properties.
It wasn’t until Gillett Holdings filed for bankruptcy in 1991, which led to Vail Resorts being scooped up by private equity giant Apollo the year after, that the foundation was set for the company to become the largest resort owner in the world. Two jewels of the portfolio, Breckenridge and Keystone, were acquired in 1997, and in the following decades, more were added at an increasing pace. Today, Vail boasts ownership of 34 ski resorts in the US and a global total of 41, playing host to nearly 20 million skiers last year.
As you might imagine, running a ski resort is not a capital-light endeavor. Before you make a single dollar, you need to plow millions of dollars into acquiring or leasing suitable acreage, build miles of lifts, groom pistes and ski runs, construct accommodation, and build amenities… all of which needs to be done halfway, or sometimes the entire way, up a mountain.
Once you’ve done all of that, with enough visitors the economics become profitable. Labor costs — think lift operators and engineers, retail staff, ski instructors, snow groomers, etc. — account for more than 40% of the mountain segment costs, but the company also faces serious costs in snowmaking operations, an expense lumped under other, as ski resorts look to artificial snow to make up the snow shortfall.
